Research shows which states, and which kinds of towns, have rural hospitals at most risk of financial distress

University of North Carolina map; click on the image to enlarge it.

The North Carolina Rural Health Research Program has released three new findings briefs about financial distress in rural hospitals. The program is administered by the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill.

The first brief compares the percentage of rural hospitals at high risk of financial distress in each state. The map above shows each state's percentage range and number.

The second brief outlines the characteristics associated with communities served by hospitals at high risk of financial distress. Those communities tend to have higher minority populations, lower high school graduation rates, higher unemployment rates, and more adults who are obese, use tobacco, and/or suffer premature deaths.

UNC map; click the image to enlarge it. Refer to the third brief for definitions of different CMS reimbursement types.

The third brief shows trends in financial distress among rural hospitals from 2015 to 2019. It found that the proportion of rural hospitals predicted to be at high risk of financial distress increased from 7.1% in 2015 to 9.2% in 2019, especially in the South and especially among hospitals that rely more on Medicare reimbursements.

The brief also shows that hospitals with a Prospective Payment System now tend to be at greater financial risk than Medicare-dependent hospitals, though both types are at increasing risk (as shown above). In a PPS, the government reimburses hospitals for Medicare and Medicaid patients' care with a predetermined, fixed payment. A Medicare-dependent hospital is a small rural hospital that has at least 60 percent of its inpatient days or discharges attributable to Medicare beneficiaries and is not the sole hospital in a community.